Rick Ackerman

Your guess concerning what the stock market will do next is as good as mine. From a technical standpoint it looks like a coin toss with regard to the question of up or down, even BIG up or down. It's tempting for me to say that Mr. Market can't waffle for much longer. But as we know, he could screw with our brains for a hundred Sundays without divulging much of anything. If I had to bet on one indicator, however, it would be VXX, an ETF that tracks short-term S&P volatility. I have been predicting that it will go significantly lower in search of a launching pad. That implies that stocks will continue to move higher in the weeks ahead. I am not ruling out a devastating collapse as soon as...tomorrow morning, but betting the ranch on this has not been a winning game.

Crude's long-term chart should make bulls think twice before they get excited by the next dead-cat bounce. Although chances are nil that the price will fall to the $2.06-per-barrel target shown, evidence is persuasive that a drop to well below $30 is likely. For one, the most recent dead-cat bounce failed to take out the key, bull-trap peak at 62.75 recorded two years ago. And for two, the down-move in December 2014 through the 58.45 'midpoint support' leaves no doubt that the bear market begun from 148 in 2008 has unfinished business. In the meantime, a rally back up to 58.45 would trip a 'mechanical' short that we should be prepared to exploit.

It is only on the very long-term charts that we can see that the dollar's unabated weakness since January has actually been part of a larger, very bullish chart pattern going back six years. In fact, the decline so far, from a 103.82 peak to a recent low at 95.47, has yet to exceed even a single prior low. Moreover, the decline would need to continue all the way to 78.91 to diminish the bullishness of this chart. Another plus for the dollar is that before it began to fall, the January high exceeded an external peak at 102.15 recorded in March 2003, creating a still-viable impulse leg of monthly-chart degree. The foregoing suggests that the long-term-bullish case deserves the benefit of the doubt despite current weakness. I expect the decline to continue well into summer, but if and when it reaches 92, near the May 2016 bottom, we could see the best buying opportunity in more than three years.

Index futures were quiet Tuesday night ahead of what remains of the holiday-shortened week. The theme du jour has been rotation out of tech and into just about everything else, particularly bank stocks (which have turbocharged their ascent with record share-buybacks). However, this aberrant behavior on the part of fund managers is unlikely to last, since their obsidian hearts just aren't into it. Their first love -- not to mention, their bread and butter -- is the FAANG/lunatic high-flyers, as we know. The ease of making big bucks by simply throwing Other People's Money at a handful of one-decision stocks is just too attractive to pass up. And the beat goes on.

Monday's swan dive brought the futures down to within a hair of the 1217.50 target we've been using since this vehicle last traded above 1250. In lieu of bottom-fishing with a 'camouflage' set-up, I'll suggest using only a 'counterintuitive' trigger to get long -- but only if you have mastered this tactic (and understand why, for one, the point 'C' low does not come to exist until the trade happens). This would entail jumping on a rally like the one I've sketched hypothetically (see inset). Ideally, it would begin from a point 'C' low Wednesday in the range 1218.50 (already achieved) - 1216.80. Be sure to take a partial profit if the anticipated rally reaches p. My gut feeling is that the futures eventually will work their way down to March lows near 1200 before they can turn around._______ UPDATE (Jul 5, 11:42 a.m. EDT): Officially, the 'counterintuitive' (CI) entry won't trigger even if the futures rise to x=1236.80, since Gold's would-be point 'C' low fell three ticks beneath the bottom of the range I'd specified above. Even so, the lesson should not be lost concerning how well these set-ups work. Look out below if this brick cannot make it to x=1236.80 now that it has stopped out bulls beneath the important low from May 9.

The Cubes have fallen to within a hair of our 135.86 target, recording their intraday low on Monday at 135.80. Ordinarily, this Hidden Pivot support would have been worth bottom-fishing. However, due to the interruption of the July Fourth holiday, we're probably better off taking a pass this time just for the sake of caution. Besides, the low slightly breached May 18's 135.87 bottom, generating a bearish impulse leg on the hourly chart. This can be a subtle sign of weakness to come, but in any event it should open our minds to the possibility that the next rally will be corrective rather than impulsive. To put it another way, QQQ may need to take another leg down, perhaps after a short rally in the days ahead, before it can muster a running start for a rally to new all-time highs.  There is also a small possibility that June 9's 143.90 peak could prove to be the elusive Mother of All Tops._______ UPDATE (Jul 5, 7:25 p.m.): The Cubes got a bounce today, but they will need to exceed the 139.08 midpoint pivot to start looking meaningful. At that point we would shift our attention to a rally target at 143.83 (60-minute, A=135.87 on 5/18). ______ UPDATE (Jul 6, 10:14 p.m.): Bulls went nowhere Thursday, but they need only rally this vehicle to 137.91 to go mildly on the offensive.  A close above 138.43 would be doubly bullish.

AMZN has made rapid progress toward the 938.17 correction target we've been using for the last week or so.  I emphasize the word 'correction, since every bout of weakness since 2009 has been engineered to shake loose shares into the hands of AMZN's canny sponsors at relative bargain prices. We should plan on joining them with a bottom-fishing bid if and when this target is closely approached, but it may require a 'camouflage' or 'mechanical' set-up to do so with risk very tightly controlled. As always, you should tune to the chat room when appropriate if you're interested, since that is where we are best able to adjust our strategies on-the-fly.

Tracking this rabid weasel has been an exercise in tedium, since any forecast I could offer you for the short-term is contingent on the futures doing 'something' directional. That may not sound like much to ask, but it's more than this vehicle has delivered in the last couple of days. Regardless, my guidance was not much affected by Monday's head fake and the gratuitous intraday hump that resulted.  Assuming the futures haven't exceeded 2436.50 to the upside first, you can bottom-fish a tick above the red line with a stop-loss as tight as 2424.25. Alternatively, and as noted here before, an uncorrected rally above the 2447.50 peak shown (see inset) would jolt short-squeeze forces into high gear.______ UPDATE (Jul 6, 11:18 a.m. EDT): The 2415.25 midpoint support was breached in the first hour, implying the downtrend is likely to continue to the 2394.00 'D' target. The stop-loss I'd suggested for purposes of bottom-fishing was a misprint for which I apologize; it should have been given as 2414.25. However, because the stop was above the bid, there should have been nothing done on the trade.

I've updated only the E-Mini S&P tout for Monday, a sort-of holiday, and will resume full coverage ahead of Wednesday's opening. For the moment, however, the intraday charts suggest that if the broad averages do not move at least moderately lower over the next couple of trading days, their odds of launching significantly higher, presumably driven by a powerful short squeeze, will improve.